At the beginning of the 1990's the first encouraging results on GDP growth combined with the fulfilment of international requirements led many to believe that Albania was a `shining star' in Central and Eastern Europe. But in 1997 this progress was reversed by unprecedented institutional, political and social turmoil leading to a spiral of violence and chaos.
This book presents, for the first time, a comprehensive analysis of the different factors behind the 1997 political, economic and social upheaval in Albania. It shows that the crisis was both predictable and complex, and not simply a matter of a disgruntled population attempting to regain their money. Using extensive and detailed evidence Daniel Vaughan-Whitehead identifies the major reasons for the growing discontent and final explosion: - the increase in unemployment, collapse of industrial production, inefficiency of the banking system, limitations and drawbacks of foreign investment, failure of mass privatization, falling living standards, and rising poverty. He examines the consequences of the crisis at the enterprise level, by region, sector, industry and property form using a unique survey of over 1,000 enterprises. In conclusion he offers a series of policy recommendations with a view to regenerating production whilst avoiding a new social explosion in a destroyed economy, weakened by political instability and the conflict in Kosovo.
This unique book will be essential reading for all academics working in the area of transition as well as policymakers from international organizations involved in transition economies.
Daniel Vaughan-Whitehead, Senior Economist, International Labour Office, Geneva, Switzerland and Professor, Sciences Po, Paris, France and the University of Geneva, Switzerland
Contents: Preface Part I: Assessment: The Reasons for the Crisis 1. The Apparent Rapid Success of the Balkan Tiger 2. The Profound Crisis in Industry 3. Difficulties in Emerging Services 4. The Missing Pillar: The Inadequacy of the Banking System 5. The Unemployment Shock 6. Impoverishment Wages and Incomes 7. The Avoidance of Social Dialogue and Participation 8. The Failure of the Mass Privatisation Programme 9. Limitations and Drawbacks of Foreign Capital 10. The Collapse of the Albanian Pyramid Part II: Prospects: Albania after the Storm 11. The Extent of the Destruction 12. A Halt to Economic Activity 13. Macroeconomic Indicators Moving Backwards 14. The Social Abyss 15. Reviving Production Forces 16. Reviving Life Forces Bibliography Index